Monday, May 7, 2012

The Dark Night of Fascism

There's an old wag saying that goes (with variations) "the dark night of fascism is always descending on America, but landing first on Europe".  While it has happened before, it's a bit premature to assume it will always be that way.

This weekend, the modern Greek version of the Nazi party, The Golden Dawn, advanced in their power, claiming 21 seats in the Greek parliament.  A marginal party before the collapse began, they managed to get 0.29% of the vote in the 2009 election.  Some reports are putting their portion at over 10% of the vote - over 30 times bigger in 3 years.
“Nobody can stop 100,000 members of Golden Dawn,” he said, “and if they bring tanks, they should know they (the Greek military) will be with us.” As for the election results, he said the party actually won 10 percent, not 7. Then he predicted: “The 7 percent will become 17 percent, which will become 27 percent, and then the country will pass into our hands.”

Read more here:
Actually, when you roll up all of the Greek minor parties, like most of Europe, they are essentially different flavors of vanilla - where vanilla is Monster Government.  There's a variety of collectivists in there, but as with that jar of mixed nuts you buy, when you get down it, they're all nuts.  These particular folks are adamantly against the reforms and financial austerity imposed on Greece.  In other words, there is no such thing as real money, real worth, real trade, just keep giving us our benefits.  
(the Golden Dawn flag.  Not too derivative...)

Speaking of mixed nuts, another case in point is "socialist" Francoise Hollande who just won the presidency in France.  I think you and I would call him a communist, but in his context over there, he's a bit less extreme.  He has already declared his answers to be "tax the rich" (gee, where have I heard that before...) and I've heard the number "75% rate" going around.  Ambrose Evans Pritchard (UK Telegraph's Business editor) quotes: 
“They absolutely must cut public spending and control the debt,” said Marc Touati from Global Equities in Paris. “It will soon be clear that we are in deep recession. If they don’t act fast, interest rates will shoot up and we will have a catastrophe by September,” he said.
If you're a free market thinker, you're probably saying "75%?  That will kill their economy - knock it into severe recession".  At least, I'm thinking that.  If confiscatory taxing kills their economy, and they're one of the two remaining sticks holding the Eurozone together, the whole Eurozone collapses.

The Financial Times posts "The Analysts React" but the bottom line is that they probably don't have anybody who knows what's going to happen.  Still, let me drop a quote or two, from Kit Juckes at Societe Generale, if you can't read that piece.
The economics team have published a roadmap for the first hundred days of the Hollande Presidency. All assume he will open the debate with Merkel about slowing the austerity drive, most assume his policy bite won’t be as bad as his electioneering bark. Personally, I think we need to distinguish between the direction of policy and the macro impact of policy. What bothers many about French fiscal policy is the sheer size of the government in the economy overall. But the structural need to nurture the private sector and limit the power of the state isn’t at all the same as needing permanent austerity and economic misery. This is only important now because to argue for more austerity in Europe is just plain silly – the sort of silliness that could bring the whole thing crashing down. (emphasis in original - SiG)

The Greek result was no more of a surprise than the French one but is is a wilder card event. At the moment, it looks as though a coalition can be formed, but how long a new government could survive isn’t clear. The Greek people have spoken, but only to say they are disillusioned and angry. My bet for today is that the US, having sold risk off after payrolls that were soft but not soft to change anything, will bounce. If that happens, we will have an edgy day in which ranges hold. The catalyst for a decisive move lower by the euro remains absent, though the move is inevitable eventually.

Gang, we are talking about the collapse of the Euro.  While there is some encouraging talk to be found that says a growing number of Europeans see the EU as a disastrous mistake and want it gone before they all go down the tubes, there are still many billions of dollars/euros at stake and powerful interests who would gladly inflict incredible suffering on the people to get their way - which is to say, to get their money and power.  And in case you missed it, Peter Schiff, who's good enough at this stuff to do it for a living, says the US is not far behind and the dollar is headed for collapse, too.  The collapse of the Euro, or another Fed disaster like "The Mistake of 1937" could hasten the demise of the dollar. As CA at WSRA points out, even taken with a grain of salt, this article paints a pretty interesting picture incorporating these pieces. 


  1. Tax the rich,
    Feed the poor,
    Until there are,
    No rich no more.

    Gee....sounds like an old song I used to listen to....

    1. At least the songwriter for 10 Years After had the honesty to admit this:

      "I'd love to change the world
      But I dont know what to do
      So I'll leave it up to you

      And note that the endstate of taxing the rich and feeding the poor isn't an end to poverty, but an end to wealth. I like to think that the songwriter had some inkling of this endstate, and therefore lyrically threw up his hands in despair.

    2. AuricTech - exactly: it's an end to any sort of prosperity in the society. Everyone has exactly the same thing: nothing. At least he was smart enough to see it and honest enough to say it. Unlike politicians.

  2. I'd like to say it's 10 Years After that was popular, but I guess it's more like 40.

    The problem is more like they said in Battlestar Galactica, "All of this has happened before and all of it will happen again".

  3. Yes, the album came out in 1971, so 40+ years.
    And those who do not remember (or READ!) history are condemned to repeat it.

    1. The major lesson of history is that nobody learns from history.

  4. Brian in FloridaMay 8, 2012 at 1:40 AM

    Germany? Good question Borepatch and with good reason, Germany saw the writting on the wall and are in full recovery mode. This bares watching.
    Germany is no fool, after losing 2 wars, recessions and the collapse of the Wall and the influx, they have gotten smarter and started a couple years ago to "Shore Up" as it were.
    Keep a close eye on them as the rest of Europe implodes and we follow close behind.

  5. Europe repeats its' history once again,we sit and watch without ability to halt the slid into hated and tribal warfare that is socialism.
    The election in France make me think of sometime I heard once before:
    Soldiers, Sailors and Airmen of the Allied Expeditionary Force! You are about to embark upon a great crusade, toward which we have striven these many months. The eyes of the world are upon you. The hopes and prayers of liberty loving people everywhere march with you. In company with our brave Allies and brothers in arms on other fronts, you will bring about the destruction of the German war machine, the elimination of Nazi tyranny over the oppressed peoples of Europe, and security for ourselves in a free world.

    Your task will not be an easy one. Your enemy is well trained, well equipped and battle hardened, he will fight savagely.

    But this is the year 1944! Much has happened since the Nazi triumphs of 1940-41. The United Nations have inflicted upon the Germans great defeats, in open battle, man to man. Our air offensive has seriously reduced their strength in the air and their capacity to wage war on the ground. Our home fronts have given us an overwhelming superiority in weapons and munitions of war, and placed at our disposal great reserves of trained fighting men. The tide has turned! The free men of the world are marching together to victory!

    I have full confidence in your courage, devotion to duty and skill in battle. We will accept nothing less than full victory!

    Good Luck! And let us all beseech the blessings of Almighty God upon this great and noble undertaking.

    -- Gen. Dwight D. Eisenhower

  6. So consider that Canada and the US are siblings of the same mother. Sibling rivalry, family fights, etc - still siblings and I can't see one getting too far out of line with the other...

    So what's this mean?

    Canada has given up on the penny.

    The "penny" is really nothing more than a symbol of the smallest unit of measure in our decimal system of currency.

    "Something" needs to be the "unit".
    1 banana perhaps...
    1 "something"

    The penny costs too much. What?
    (and the nickle as well, I believe)
    That's contrary to the purpose of the penny.

    So is this the first step to chopping a zero off our money?
    The dime becomes the new penny?

    Maybe the dollar becomes the new penny?

    The de facto currency of the world isn't the US dollar - it's the US $100. Perhaps soon to become the US dollar

    Don't expect a linear transformation: What you make will be a little less; what you spend will be a little more.

    Your $100,000 salary becomes $9,500; your $100,000 loan becomes $10,500. Your $30,000 tax bill becomes $3500.

    (And I can't recall in my reading of history a more Fascist-leaning American administration than we appear to have now - fascism by definition being government control of private industry.)

    2013 oughta be an interesting experience for those of us that survive ... in the sense of the Chinese proverb.

    Just speculating...

    1. Inflation is one of those dead horses I beat even more senseless around here. If you look carefully, you'll find that not only are prices going up, the quantity you get is going down. Even my cat's food cans have gotten smaller. So yeah, your money gets smaller.

      I wouldn't be surprised to see pennies go away, but I always figured nickles would be next. Of course, it costs almost 7 cents to make a nickle, so they're not long for this world either. Next: nickles made of ceramic.

  7. To a first order approximation, there isn't much difference between fascism and socialism. Do distinctions in who "owns" everything matter that much, as long as you personally can't own any of it? When you look into that bag of mixed nuts, they're all nuts. They're all large, oppressive governments where there is no personal liberty.

    The Golden Dawn party is worth watching because they grew by over 20 fold (7/.3) in 3 years. Similarly, Nazi parties are growing all around the world. Not just parties that resemble Nazis, parties that call themselves Nazis. As anon 10:11 points out, all the old hatreds are rising again, all the old wounds are opening again.

    I don't know that Greece or France pull out of the Euro or if it collapses around them. Does it pull them all down, or do they hold it up? We'll know more about Germany as the months go by and we see how Mrs. Merkel holds up. There are anti-Euro groups in Germany, too. Germans are getting mad because they're working to 70 to pay for people who retire at 55.

    All around the world socialists, communists, fascists, Islamofascists and nationalist socialists aren't on the rise. Do you think this ends well?

  8. James Wesley, Rawles has been talking on his web site about investing in nickels for some time now, claiming that it won't be long before the value of the metal (nickel) will increase far beyond what it currently is, as has happened with silver and gold. I think he said there is a change scheduled for next year to some other metal (or your idea of ceramic?) so that the value will fall back below 7 cents per nickel.

    1. I'm probably the only saying ceramic. They could use plated zinc, like pennies, and still make them. Plus, they already have the process and don't need to invest in ceramic molding and firing equipment.